NCDEX launches forward contracts in 7 new agri-commodities

Leading agri-commodity exchange, NCDEX, today launched forward contracts in seven additional commodities, including urad, tur and yellow peas.

With this, the total number of commodities available for forward trading on the NCDEX platform has increased to 26.

In an official statement, NCDEX said forward contracts in seven new commodities -- urad, tur, yellow peas, soyabean meal, pepper, RBD palmolein and bajra -- will be on a fixed price basis.

The buyer and seller would have flexibility to trade any quantity and quality of commodity at a mutually agreeable price, it added.

Speaking at the launch, NCDEX Managing Director and CEO Samir Shah said: "With India being the biggest producer, consumer and importer of pulses in the world, the trading fraternity faces price risks which can threaten the profitability of their enterprise.

"Pulses forwards can provide them with not only a robust risk management tool but also transparent price discovery and national market access," he said.

NCDEX further said that Indian Pulses and Grains Association (IPGA) will work with the exchange to educate the traders about the benefits of risk management and exchange traded forwards.

IPGA chairman Pravin Dongre said: "Most importers enter into forward commitments with overseas exporters and the availability of exchange traded forwards will go a long way in building confidence among the participants. We will extend our utmost support to educate the industry about this tool."

In September 2014, NCDEX had launched trading in forward contracts. Initially, it offered forward trading in sugar and maize and gradually expanded the product basket.

A forward contract is a bilateral agreement between two parties to buy or sell an asset or a commodity of specified quantity and quality at a future date on a mutually agreed delivery price.